Marion's cities present 'no harm' formulas for sharing gas tax

In this Jan. 22, 2013 file photo, Gary O'Neal of Salser Construction operates a grader as his son, Cory, left, cleans up along the curb, as the two work on grading the entrance to the Ocala/Marion County Commerce Park on Northwest 35th Avenue in Ocala.

Bruce Ackerman/Star-Banner

Published: Wednesday, April 10, 2013 at 12:08 p.m.

Last Modified: Wednesday, April 10, 2013 at 12:08 p.m.

Officials from the county's five cities who, like their counterparts in Marion County government, are looking for dollars to help ailing budgets in tough economic times, met with the County Commission on Wednesday to present "no harm" formulas for divvying up the gas tax dollars on which they all depend for road projects.

The commission told the city officials it will deliberate further before making a final decision in June.

The cities stand to lose a large amount of gas tax money if the county decides to keep the ninth-cent fuel tax for itself rather than sharing it, as it has in the past, and if the county reverts to the state's default formula for distributing revenue from the two local option gas taxes.

"I do believe the municipalities are united in this value judgment, do-no-harm policy," said Dunnellon Mayor Nathan Whitt, who spoke on behalf of his city, Ocala, McIntosh and Reddick.

Whitt presented the formula the four cities are proposing. Belleview presented its own population-based formula for consideration.

Clearly, the cities will be hurt if the county cuts the amount of gas tax revenue it allots.

County Commissioner Stan McClain defined the crux of the matter: "It's about the money," he said. "That's absolutely what it's about."

The five cities have interlocal agreements with the county that outline what percentages of gas tax dollars each receives from all three gas taxes. Those agreements, which have been in place for 30 years, are about to expire. The county must tell the state by July 1 how the gas taxes will be distributed, and so it asked the cities for a formula for divvying up the funds.

McIntosh Mayor Cary McCollum said previously that there was no formula 30 years ago; the division was based on politics and a handshake.

Right now, the county gets 70.1 percent of the total distribution for the three taxes. Ocala receives 23.5 percent. Dunnellon and Belleview each receive 2.56 percent. McIntosh and Reddick each receive 0.64 percent.

In fiscal year 2011-12, the county and five cities divvied up a total of $20.5 million for the three gas taxes, with the county getting $14.36 million and the cities dividing $6.12 million.

In addition to those three taxes, the county, by itself, also received an additional $6.17 million for the county's own 1-cent fuel tax and two constitutional fuel taxes.

Four of the cities came up with a formula that would "do no harm" and give each city the same percentages they have received in the past.

However, the formula allows for adjustments in future years based on population. The county has argued that its population growth has far outpaced that of the cities and, therefore, it needs a larger share of the gas tax money for roads.

Separately, Belleview devised a number of formulas based on daytime population, when people come in to work, shop and do business in town.

The public was not included in Wednesday's discussion, and the county will not hold any workshops to discuss the matter. The public will not get an opportunity to speak publicly until June, when the item is placed on the county's agenda.

Whitt said the 30-year agreements were based on value judgments, meaning what value the cities bring to Marion County. The cities argue that they are the economic centers of the county, where businesses locate and where people come to work, go to doctors and hospitals, shop, and seek entertainment.

There are three gas taxes under consideration: a ninth-cent fuel tax, which is a 1-cent tax; Local Option Fuel Tax #1, which is a 6-cent tax; and Local Option Fuel Tax #2, which is a 5-cent tax.

By law, the county is not obligated to share the ninth-cent tax with the cities, although it has done so for 30 years. The county does have to share the two local option fuel taxes with the cities, but the amounts have to be agreed upon.

If no agreement can be reached, the state has provided a default formula for the distribution. That default rate will hurt all the cities and devastate some of them.

Whitt said the ninth-cent tax is paid by city residents as well as residents in unincorporated Marion County.

"Before you kibosh the ninth-cent for us, please take into consideration that value judgment you have to make," Whitt said.

He said he understood the county's position; it must service large areas with roads.

"A lot of those are two-lane roads. A lot of ours are four and six," Whitt said, being careful to exclude state and federal roads.

County Commissioner Carl Zalak III said the county's population has grown by 230 percent in the past 30 years.

Heinbockel said she has received "mixed messages" and asked how the commission is going to approach its decision.

"I don't think anybody who is sitting on this commission wants to go out and do harm to the municipalities," commission Chairman Kathy Bryant said.

She said they are all considering different factors, such as the miles of roads and what is the best formula.

She said she had no formula on Wednesday to offer the cities.

Commissioner McClain said the cities benefit when their daytime populations swell and wondered how that could be quantified. He said regardless of the size of the roads, there are demands on the commission to make sure people can move around the county, adding that the commission represents all the people in the county.

McIntosh Councilman Marshall Roddy said his town's population decreases during the day. But he asked commissioners to consider McIntosh's historical value.

Commissioner Zalak said there is an opportunity to "set some money aside and work together to put together a five-year transportation plan collectively."

He said the county wants to see the cities flourish but would like to see improvements to some of the county's dirt roads.

Commissioner Earl Arnett said "we have to use reason."

"The unincorporated area has grown 225 percent or so. We need to look at the dollars being received for the purpose of doing road repair," Arnett said.

Dunnellon Councilwoman Penny Fleeger said her city would lose employees in its road department if funding levels are cut.

Fleeger said the county will have to take over Dunnellon's roads. She said that, because they are a small city, they have been banking dollars in anticipation of tackling large road projects.

She wondered if the county would consider treating each city separately. But County Attorney Guy Minter said the county would be open to lawsuits if it did so.

<p>Officials from the county's five cities who, like their counterparts in Marion County government, are looking for dollars to help ailing budgets in tough economic times, met with the County Commission on Wednesday to present "no harm" formulas for divvying up the gas tax dollars on which they all depend for road projects.</p><p>The commission told the city officials it will deliberate further before making a final decision in June.</p><p>The cities stand to lose a large amount of gas tax money if the county decides to keep the ninth-cent fuel tax for itself rather than sharing it, as it has in the past, and if the county reverts to the state's default formula for distributing revenue from the two local option gas taxes.</p><p>"I do believe the municipalities are united in this value judgment, do-no-harm policy," said Dunnellon Mayor Nathan Whitt, who spoke on behalf of his city, Ocala, McIntosh and Reddick.</p><p>Whitt presented the formula the four cities are proposing. Belleview presented its own population-based formula for consideration.</p><p>Clearly, the cities will be hurt if the county cuts the amount of gas tax revenue it allots.</p><p>County Commissioner Stan McClain defined the crux of the matter: "It's about the money," he said. "That's absolutely what it's about."</p><p>The five cities have interlocal agreements with the county that outline what percentages of gas tax dollars each receives from all three gas taxes. Those agreements, which have been in place for 30 years, are about to expire. The county must tell the state by July 1 how the gas taxes will be distributed, and so it asked the cities for a formula for divvying up the funds.</p><p>McIntosh Mayor Cary McCollum said previously that there was no formula 30 years ago; the division was based on politics and a handshake.</p><p>Right now, the county gets 70.1 percent of the total distribution for the three taxes. Ocala receives 23.5 percent. Dunnellon and Belleview each receive 2.56 percent. McIntosh and Reddick each receive 0.64 percent.</p><p>In fiscal year 2011-12, the county and five cities divvied up a total of $20.5 million for the three gas taxes, with the county getting $14.36 million and the cities dividing $6.12 million.</p><p>In addition to those three taxes, the county, by itself, also received an additional $6.17 million for the county's own 1-cent fuel tax and two constitutional fuel taxes.</p><p>Four of the cities came up with a formula that would "do no harm" and give each city the same percentages they have received in the past.</p><p>However, the formula allows for adjustments in future years based on population. The county has argued that its population growth has far outpaced that of the cities and, therefore, it needs a larger share of the gas tax money for roads.</p><p>Separately, Belleview devised a number of formulas based on daytime population, when people come in to work, shop and do business in town.</p><p>The public was not included in Wednesday's discussion, and the county will not hold any workshops to discuss the matter. The public will not get an opportunity to speak publicly until June, when the item is placed on the county's agenda.</p><p>Whitt said the 30-year agreements were based on value judgments, meaning what value the cities bring to Marion County. The cities argue that they are the economic centers of the county, where businesses locate and where people come to work, go to doctors and hospitals, shop, and seek entertainment.</p><p>There are three gas taxes under consideration: a ninth-cent fuel tax, which is a 1-cent tax; Local Option Fuel Tax #1, which is a 6-cent tax; and Local Option Fuel Tax #2, which is a 5-cent tax.</p><p>By law, the county is not obligated to share the ninth-cent tax with the cities, although it has done so for 30 years. The county does have to share the two local option fuel taxes with the cities, but the amounts have to be agreed upon.</p><p>If no agreement can be reached, the state has provided a default formula for the distribution. That default rate will hurt all the cities and devastate some of them.</p><p>Whitt said the ninth-cent tax is paid by city residents as well as residents in unincorporated Marion County.</p><p>"Before you kibosh the ninth-cent for us, please take into consideration that value judgment you have to make," Whitt said.</p><p>He said he understood the county's position; it must service large areas with roads.</p><p>"A lot of those are two-lane roads. A lot of ours are four and six," Whitt said, being careful to exclude state and federal roads.</p><p>County Commissioner Carl Zalak III said the county's population has grown by 230 percent in the past 30 years.</p><p>"If that trend continues, this (formula) would adjust to address that," Ocala Councilwoman Suzy Heinbockel replied.</p><p>Heinbockel said she has received "mixed messages" and asked how the commission is going to approach its decision.</p><p>"I don't think anybody who is sitting on this commission wants to go out and do harm to the municipalities," commission Chairman Kathy Bryant said.</p><p>She said they are all considering different factors, such as the miles of roads and what is the best formula.</p><p>She said she had no formula on Wednesday to offer the cities.</p><p>Commissioner McClain said the cities benefit when their daytime populations swell and wondered how that could be quantified. He said regardless of the size of the roads, there are demands on the commission to make sure people can move around the county, adding that the commission represents all the people in the county.</p><p>McIntosh Councilman Marshall Roddy said his town's population decreases during the day. But he asked commissioners to consider McIntosh's historical value.</p><p>Commissioner Zalak said there is an opportunity to "set some money aside and work together to put together a five-year transportation plan collectively."</p><p>He said the county wants to see the cities flourish but would like to see improvements to some of the county's dirt roads.</p><p>Commissioner Earl Arnett said "we have to use reason."</p><p>"The unincorporated area has grown 225 percent or so. We need to look at the dollars being received for the purpose of doing road repair," Arnett said.</p><p>Dunnellon Councilwoman Penny Fleeger said her city would lose employees in its road department if funding levels are cut.</p><p>Fleeger said the county will have to take over Dunnellon's roads. She said that, because they are a small city, they have been banking dollars in anticipation of tackling large road projects.</p><p>She wondered if the county would consider treating each city separately. But County Attorney Guy Minter said the county would be open to lawsuits if it did so.</p><p><i>Contact Susan Latham Carr at 867-4156 or susan.carr@starbanner.com.</i></p>